Assume That U

question 49

Multiple Choice

Assume that U.S. interest rate for the next three years is 5%, 6%, and 7% respectively. Also assume that Canadian interest rates for the next three years are 3%, 6%, 9%. The current Canadian spot rate is $.840. What is the approximate three-year forecast of Canadian dollar spot rate if the three-year forward rate is used as a forecast?

• A) $.840
• B) $.890
• C) $.856
• D) $.854

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Monetary Compensation

Financial payment received by an individual or group for services rendered or as a recompense for losses suffered.

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